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Hillarycare: The Sequel

Barack Obama achieved more significant change in domestic policy during the first two years of his presidency than any president since Richard Nixon has over the course of four or eight. That’s because in 2010 Obama signed into law the Patient Protection and Affordable Care Act. We don’t know how this story will end, but there’s now a law on the books that, for all its many shortcomings and unpopularity, will extend health coverage to most of this country’s uninsured. According to the Congressional Budget Office, the share of legal nonelderly residents who have health insurance will rise from 83 percent to 94 percent. Thanks to the Affordable Care Act, some unquantifiable number of people will live who would otherwise die.

Paul Starr’s compact but thorough “Remedy and Reaction” is an unofficial companion volume to his Pulitzer Prizewinning 1982 book, “The Social Transformation of American Medicine.” The new book would be livelier if it didn’t confine itself to policy. But Starr is a sociologist, not a historian or journalist (though he moonlights as a co-editor of The American Prospect, a respected liberal monthly). His long, wonky trail begins in the Progressive Era, when, contrary to Obama’s claims, Washington did not debate health insurance during the presidency of Theodore Roosevelt. What is true is that Roose­velt’s 1912 Bull Moose platform called for “the protection of home life against the hazards of sickness . . . through the adoption of a system of social insurance.” Roose­velt lost to Woodrow Wilson, but even if he hadn’t, Starr writes, he’d have understood (if only because of Supreme Court precedent) that any such social insurance could have been provided at that time only on the state level.

By Franklin Delano Roosevelt’s day, medical costs were rising briskly, a private market for health insurance was coming into being, and judicial barriers to federal action were falling away. But plans to include government health insurance in the 1935 Social Security Act were scuttled after the American Medical Association lobbied against them. In 1945 Harry Truman proposed a universal health insurance program to be run at the federal level, but the A.M.A. killed that off too.

The physicians’ group finally met defeat in 1965 when Lyndon Johnson created Medicare, a federal health insurance program for the elderly, and Medicaid, a combined federal-state program for the poor (though the final terms were so favorable to doctors and to hospitals that it looked more like an A.M.A. victory). Starr argues that putting a large pool (the elderly) into a generous health plan separate from everyone else was a strategic blunder. Liberals hoped to extend Medicare, or something like it, to the rest of the population, but existing Medicare recipients saw nothing in it for them.

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Illustration by Joon Mo Kang

Richard Nixon, seeking to regain public approval as the Watergate scandal unfolded, unveiled a health care plan that was arguably the most expansive proposed by any president after Truman. Employers were required to provide generous health insurance at low cost to all workers and their families; all others were covered through a government program. Senator Edward Kennedy signaled his likely support. But Nixon’s resignation in 1974 halted the effort. Jimmy Carter proposed a watered-down version of the Nixon plan in 1979, but it went nowhere. Carter was more interested in a hospital cost-­containment plan (which also went nowhere).

Starr persuasively presents the efforts of the Clinton and Obama administrations as a single drama with a 15-year intermission (and an entr’acte wherein President George W. Bush created a costly Medicare drug benefit without the normally required financing). According to Starr, who was a senior health policy adviser in the Clinton White House, so-called Hillary­care was far less the first lady’s plan than it was the president’s: Bill Clinton provided the outline and ran the meetings. Under the proposal, people would no longer purchase health insurance from their employers. Instead, they would be pooled into “regional health alliances” set up by the states that offered multiple private insurance options. These private insurers would be required to offer uniform deductibles, co-payments and other benefit features, and therefore would compete solely on price. Employers would pay most of the premiums, with the remainder covered by the policyholder, the government or some combination of both. That’s a pretty bare-bones description of a program that was maddeningly complicated — no, you didn’t imagine that at the time — but Starr, as one of its architects, won’t acknowledge this liability. Nonetheless he’s probably right that what did the plan in wasn’t complexity so much as rabid partisanship (John Boehner and other House Republicans actually bullied the Chamber of Commerce into withdrawing its support and joining the opposition) combined with lukewarm support among Democrats, especially the Senate Finance Committee chairman, Daniel Patrick Moynihan, Democrat of New York. Moynihan’s lifelong gift for scouting out social currents failed him when he pronounced early on, “We don’t have a health care crisis.” Interestingly, the famous “Harry and Louise” ads sponsored by the health insurance industry had little impact on public opinion.

By the time Obama became president the private health care system’s financial problems were so acute that doctors, hospitals and drug companies were ready to cut a deal. Even insurers were willing to accept regulatory controls in exchange for an “individual mandate” that required everybody to buy health insurance, and the larger business community was vaguely supportive. Rather than overhaul the entire system of health insurance, the new legislation left employer-based health insurance largely intact (“If you like your health plan you can keep it”; who these satisfied customers are I’ve never been able to fathom) and concentrated on the market for individuals, where the worst abuses occurred. The blueprint was the Massachusetts reform enacted under Mitt Romney when he was governor.

None of these advantages made it easy for Obama to get his health reform through Congress. They merely made it possible. Republicans were at least as partisan in their opposition as they’d been in 1994, with even Romney condemning the bill. The health insurers withdrew support as the result of a split between the big five for-profit companies, which were strongly opposed, and their own trade association, which leaned in favor. The left got shaky when the “public option,” a government insurance program, was dropped after conservative opposition. And at the last minute a rebellion among conservative House Democrats making a tortured argument that the bill authorized government-funded abortions — by any reasonable logic it did not — seemed likely to kill the bill. How the House speaker, Nancy Pelosi, quashed it and steered the bill to passage is a story that remains to be told. You won’t find it here.

Starr’s main real-time contribution to the Obamacare debate as a health policy expert was to warn that the individual mandate — believed financially necessary if insurers were to provide coverage even to people with “pre-existing conditions” — would be unpopular. Now that it seems less certain to get past the Supreme Court, Starr’s concern seems prescient. I don’t find terribly plausible Starr’s favored alternative: allowing people to opt out of the mandate if they sign a form acknowledging that they’ll be ineligible for federally subsidized coverage for five years. Should these grasshoppers become seriously ill during those five years, not much will be gained in telling them, antlike, “I told you so.” Anyway, it’s too late to build any fallback procedures into the bill. Should the Supreme Court chuck Obamacare, health policy will be back to Square 1, and Obama’s presidency will be instantly transformed from a substantive success to a substantive failure. I fear that Justices Roberts, Thomas, Scalia, Alito and Kennedy may find that possibility too tempting to pass up.h

REMEDY AND REACTION

The Peculiar American Struggle Over Health Care Reform

By Paul Starr

324 pp. Yale University Press. $28.50

Timothy Noah is a senior editor at The New Republic. His book “The Great Divergence,” about America’s three-decade rise in income inequality, will be published in May.

A version of this review appears in print on November 20, 2011, on Page BR26 of the Sunday Book Review with the headline: Hillarycare: The Sequel. Today's Paper|Subscribe